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States Likely to Get More Authority to Implement Health Care

Dec. 12 — More authority to regulate health-care issues will be delegated to states under the
Trump administration and Republican Congress, the first Obamacare exchange regulator
said Dec. 12.

The Obama administration gave states a number of options in setting up health insurance
exchanges under the Affordable Care Act, and it delegated authority to states to set
standards for essential health benefits that most individual and small group plans
must cover, Joel Ario, managing director of consultant Manatt Health, said. Letting
states decide how to implement health-care decisions is likely to be the model followed
by President-elect Donald Trump and the Republican Congress in making changes to the
ACA, he said on a
panel convened by the American Enterprise Institute, a free market-oriented think tank.
Ario was the first director of the Office of Health Insurance Exchanges at the Department
of Health and Human Services.

The Trump administration will have many options for unraveling the regulations, regulatory
guidance and executive orders issued by President Barack Obama in implementing the
controversial 2010 law. But some of those options, such as stopping what Republicans
say are unauthorized payments of ACA cost-sharing subsidies, would result in health
insurers pulling out of the exchanges and millions of people losing coverage, which
would end up putting Republicans in a bind.

The U.S. District Court for the District of Columbia ruled in favor of House Republicans,
who filed a lawsuit against the Obama administration over the cost-sharing subsidies
for low-income people. The case is being appealed, but the appeal is on hold (
U.S. House of Representatives v. Burwell, D.C. Cir., No. 16-5202, 12/5/16
)
(
234 HCDR, 12/6/16
).

Of the approximately 11.1 million consumers who were enrolled in ACA marketplace coverage
at the end of March, 57 percent—nearly 6.4 million consumers—received the cost-sharing
reductions for copayments and deductibles,
according to the Department of Health and Human Services.

`A Massive Headache.’

If the incoming administration’s position is that paying the cost-sharing subsidies
is illegal, it would be “a criminal violation for the executive branch to continue
making payments,” Daniel Meron, a partner with law firm Latham & Watkins LLP in Washington,
said. “This is going to turn out to be a massive headache.”

The Trump administration is “going to have to make a decision, pretty early on, as
to what their position is” concerning the lawsuit, Meron said. In order to compensate
insurers for covering the cost-sharing subsidies, Republicans may want Congress to
appropriate cost-sharing payments for the short term, he said.

“If Trump wants to dismantle the ACA then he’ll need to repeal and replace rather
than drop lawsuits and deregulate,” Daniel Hemel, assistant professor at the University
of Chicago Law School, said.

Congress is likely to use the budget reconciliation process to repeal significant
portions of the ACA, Josh Blackman, associate professor of law at the South Texas
College of Law Houston, said. That will “create sort of a game of chicken,” with Republicans
calling on Democrats to support a replacement plan. If Republicans win enough Senate
seats in the next election, they could have a 60-vote majority to override a filibuster
and pass their own replacement plan, he said.

Resist Urge to Do Things Quickly

But there could be many lawsuits filed if Trump administration agencies dismantle
the law through regulatory actions, Adam White, a research fellow with the Hoover
Institution in Washington, said. “That illustrates why it’s so important for the new
administration—if it wants to succeed in its reforms administratively, it’s going
to have to resist the urge to do things quickly, and do things prudently.”
The Hoover Institution is a Stanford University public policy think tank.

“If Congress wants to get rid of this law immediately they can,” Ario said. “And if
Donald Trump wants to get rid of it immediately, he can. He can disrupt peoples’ coverage
in 2017 and the law will be toast,”
he said.

“I think Congress is much more likely to do it than Trump,” since congressional Republicans
have voted more than 50 times to repeal major portions of the law, Ario said. However,
he said he doesn’t believe either Congress or Trump will “actually get rid of the
law,”
because millions of people would lose coverage without it.

To contact the reporter on this story: Sara Hansard in Washington at
shansard@bna.com

To contact the editor responsible for this story: Kendra Casey Plank at
kcasey@bna.com

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